Published: January 26, 2021 7:15 AM |
Last updated: January 26, 2021 at 7:15 am
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The farmers of Punjab are moving to Delhi to take part in their tractor rally on January 26th as part of the ongoing agitation against agricultural laws. (Photo | PTI)
The agitation of farmers on the borders of Delhi is preparing to hold a tractor rally on Republic Day against the backdrop of a standstill in negotiations with the center on the three agricultural laws. Although the Supreme Court has established a committee of experts, there is still progress to be made. The current agitation has sparked a debate about the systemic problems of agriculture. Bottlenecks at every stage have contributed to the stagnation of farm incomes.
This is in stark contrast to the Netherlands, the second largest exporter of vegetables. This was achieved despite its proximity to the Arctic Circle and a higher population density than India. The Dutch have brought the latest technology in line with market demands to produce yields per acre that are twice the global average. The mantra “twice as many food resources with half as many resources”, adopted in 2000, guided their experiences.
Similarly, one could look at the centre’s agenda to double farmers’ incomes by 2022. However, this vision will not materialize because our agricultural policy has not produced the desired results. In addition, the unintended environmental and health consequences of policies to maximize wheat and rice production have come to the fore.
In a 2018 report, the Central Groundwater Board found that 80% of Punjab has overused its groundwater resources . Investigations by Dr. Ashok Gulati from ICRIER have shown that excessive use of chemical fertilizers, due to their artificially low prices, has impaired soil health and exacerbated diseases such as blue baby syndrome.
Incentives that heavily subsidize inputs such as water, electricity and fertilizers, can be traced back to the era of food shortages in the 1960s. During this time, farmers from Punjab and Haryana took it upon themselves to turn India into a food-surplus nation. Thanks to input subsidies and a secure market in the form of public procurement at MSP, they tripled India’s total food grain production from 82 MMT in fiscal 1961 to 297 MMT in fiscal 2020.
However, these subsidies have now started to generate declining returns. Farm income stagnated along with growing health and environmental concerns. For example, Punjab was the richest state in 1980, but has since fallen to 13th place in FY2019, behind states like Maharashtra, Haryana, Gujarat, Tamil Nadu, Kerala and Karnataka. The Punjab Economic Survey 2019-20 states that agriculture and related activities account for nearly 30% of Gross Value Added (GSVA). However, in recent years the sector’s growth has slowed to just 2.3%. This is due to declining rice and wheat yields.
The survey finds that only diversification into high quality commodities such as horticulture, legumes, oilseeds and livestock can stimulate agricultural income growth. In this way, farmers can take advantage of the increased demand for these products and optimize resource consumption. The Dalwai Committee found that by converting staple foods to horticulture, farmers can earn an additional income of 80,000 euros per hectare. Farmers in different regions have already seen the benefits of diversification in livestock – poultry in Maharashtra, dairy farm in Punjab Moga district and shrimp in Andhra Pradesh have brought prosperity.
Farm diversification requires broad political support. However, as the current move shows, the bid fails if it is carried out by fiat. In the absence of judicial protection measures, farmers fear exploitation by private traders. In addition, the adoption of the bills without consensus building across the political process is in stark contrast to the reform method of the past, be it the adoption of the GST in 2017 or the 1991 budget, which was supported by other parties.
So that the Farm diversification policies can be successful, three elements must be present: consensus among stakeholders, well-designed incentives and support in implementation. In order to reach a consensus, the central role of states must first be recognized. Much of agriculture is a government issue, but central governments of all political colors have actively recommended reform. This makes it an ideal subject to embody the spirit of cooperative federalism. In its eighth report, the Standing Parliamentary Committee on Agriculture recommended the establishment of a committee of state agriculture ministers to create a framework for agricultural marketing. The mandate of this committee can be expanded to develop a diversification policy that takes into account the different priorities and goals of each state.
Second, incentives should be created to encourage farmers to diversify. Haryana has made progress on the Mera Pani, Meri Virasat program, which gives farmers € 7,000 an acre to grow crops like cotton, corn and legumes instead of rice. This can be improved to serve as a minimum guarantee for the farmer deviating from a staple food. To protect them from price fluctuations in the market, the Price Deficiency Payment Scheme (PDPS) introduced in 2018 as part of the PM-ASHA system can be expanded. This gives farmers the difference between the market price and the MSP. It has a lower tax burden than government procurement
but has higher coverage. Third, you should anticipate execution challenges and be proactive with solutions. Most importantly, there is likely to be a lack of information on the benefits of diversification among farmers. Farming commentators rarely focus on intangible inputs such as information about suitable alternatives, farming methods and market conditions. Strengthening the integration into the local community of the 686 Krishi Vigyan Kendras, established across the country to provide advice and take on capacity building for farmers. Complement this by setting up a model farm in every gram of panchayat that demonstrates modern growing practices.
As these aim to empower the supplier (the farmer), eventually the demand side needs to grow too. A strong agricultural processing industry will reduce post-harvest losses and add value for export, creating lakhs from non-agricultural jobs.
The agitation of farmers has highlighted many challenges. Farmers who have worked hard to maintain food security now face stagnant incomes. Diversification must be the way forward. To convince farmers of this, careful consensus building and a diversification package are required. I have no doubt that with well-designed incentives and support in execution, even Indian farmers can double their produce with half the resources, which has the desired income impact.
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